The earnings effects of occupational segregation in Europe

Working Paper 2020-533

Abstract

The concentration of different social groups in certain occupations creates and perpetuates inequalities inside and outside the labor market. This paper quantifies the economic and well-being consequences of occupational segregation by gender and migration status in 12 European countries. The effects are negative for most foreign workers, especially for women, who always derive larger welfare losses than men. In general, these losses are remarkably high in southeast Europe and smaller in the northwest, whereas immigrant men derive very small gains in Portugal and the UK. Female natives are also deprived in most countries. However, immigrants’ characteristics, particularly education, explain a significant part of these geographical disparities. In fact, while the UK is in a somewhat better position thanks to its immigrants’ higher educational levels, the counterfactual analysis reinforces Portugal’s good position, reflecting higher levels of labor market integration among its immigrant population.

Authors: Amaia Palencia-Esteban, Coral del Rio.